If your debts are too high but pride prevents you from seeking protection under Chapter 7 bankruptcy then Chapter 13 may be the option for you. Whereas Chapter 7 allows you to start with a clean slate, Chapter 13 is a repayment plan supervised by the court. If you fall within an income category or if you are currently unemployed, the court will also allow you to pay only a portion of the total medical debt. Most people who file Chapter 13 have incomes much higher than what Chapter 7 allows.
The repayment period under Chapter 13 bankruptcy is around 3-5 years. One advantage is you get to keep your non-exempt property, which would have been sold to pay of the creditors under Chapter 7 proceedings. People who file for Chapter 13 have something in common:
They want to pay their medical bills but their current situation does not allow them to do so.
Because of their medical bills, they are behind on mortgage or car loan payments.
You already filed for Chapter 7 bankruptcy last year or seven years ago. You can only renew application for Chapter 7 after eight years.
There are other requirements to filing Chapter 13 bankruptcy medical bills but a lawyer will be able to explain to you better the constraints and benefits of the proceeding. For example, you can’t file Chapter 13 if your debts are already discharged more than two years ago. Filing bankruptcy medical bills also does not automatically eliminates taxes, alimony, child or spousal support, student loan or criminal and civil liabilities.
It’s important that you consider all your options and reflect on the advantages and disadvantages of filing Chapter 13 or Chapter 7 bankruptcy. Don’t jump to a decision without first consulting with your family, friends, co-workers and lawyers. Remember, you will end up dealing with the consequences of your actions so no matter how valuable their advises would be, the decision of whether or not you file for bankruptcy ultimately rests with you
At one time if you had fallen into debt due to medical bills and could not afford to repay them then filing for medical debt bankruptcy was common. However today there are more options open to those suffering debt problems and they are typically less severe than bankruptcy.
Medical bills can add up to an enormous sum of money and if you suddenly become unemployed then you may be unable to find the money to pay off unexpected medical bills. In the USA, many of those who have filed for bankruptcy have done so solely due to medical bills. Before rushing into bankruptcy, you might want to consider taking on the help of a debt relief company and looking into other solutions, which are less severe.
Consider debt relief to reduce the amount you owe as an alternative
One of the things you may wish to look into is if a debt relief advisor may be able to get your debt reduced, which will allow you to pay off the remainder of the debt. While you may not be able to afford 100% of the amount you owe, you may be able to get this reduced by as much as 70%, which means that you have only to find 30% of your debts and can repay this in affordable monthly repayments. This can be a very effective, powerful and sensible way to clear your medical debts.
Medical debt bankruptcy should really only be considered as the very last resort. When you file for bankruptcy, even if it is only due to medical bills, it will stain your credit rating for a very long time. This may mean that you are unable to borrow in the future or if you find a lender willing to take you on, you may have to pay very high rates of interest.
In summary, you may be able to write off up to 70% of your medical debts and pay them off rather than filing for medical debt bankruptcy and have your credit rating affected for a long time. When entering into a debt solution it is essential that you keep up with the plan, even if you are unemployed and are looking for work.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement. To locate legitimate debt settlement companies in your state check out the following link:
Medical bills are the most common reason for people seeking bankruptcy. However, seeking protection from Bankruptcy medical bills is possible because hospital bills are considered as unsecured debt. A Chapter 7 bankruptcy is perfect in the sense that it is the quickest and the debtor can walk away with just a few nicks and cuts, particularly some properties that are not covered by exemption and your overall credit score, which may impact your ability to secure loans in the future.
Bankruptcy medical bills could be the best thing that you can do to restart your financial future with a clean slate. There’s a certain stigma to declaring bankruptcy but it’s actually a very personal matter. Your privacy is protected and you can still move forward with your life as opposed to the misconception that you walk away only with your clothes on. In some cases, you can even keep your car under bankruptcy.
What happens is the court designates a trustee that will inventory your properties, determine which are exempted and sell those which are not. The money raised from the sale will be used to pay your creditors. To know which properties are exempted from Chapter 7 bankruptcy, talk to a lawyer proficient with bankruptcy laws. Some examples of properties covered by exemptions are: your house, tools or equipment you use in your profession, social security, disability or unemployment benefits, or life insurance. There could be some additional exemptions depending on state laws.
After filing bankruptcy, the court orders the creditors to stay away. But the law also allows creditors to prove that they are justified in collecting your debt, the burden of proof however swings to their side. Bankruptcy however will not wipe out all your debts. Any lien you owe prior to the medical emergency stays on records and you are required to settle it in due time.
Filing for bankruptcy medical bills will not automatically exempt you from paying the IRS. There are conditions before the federal tax agency will let you off the hook. Again, consult a bankruptcy lawyer to explain to you all the gradations of law in relation to Chapter 7 bankruptcy medical bills. You might be able to ward off your creditors but you can’t get away from the IRS. Federal agents can still swoop in even after bankruptcy and seize your properties but only if they decide that you are trying to run away from your responsibility as a taxpayer.